S&P Downgrades Portugal’s Sovereign Rating Two Notches to A-

S&P cut Portugal’s sovereign debt rating from A+ to A-, citing concerns about the Portuguese economy’s ability to stabilize deteriorating public finances. S&P expects economic growth in Portugal to remain subdued, held back by severe structural weaknesses. Furthermore, access to external financing, which has boosted economic growth in the past, will prove much more limited going forward. Fiscal consolidation will hence prove more difficult given weak economic growth prospects in the medium term. Additional fiscal austerity measures, beyond those outlined in the stabiliy program, might be required to reach the announced fiscal targets. S&P maintained its negative outlook for the Portuguese sovereign rating.